<p>New York Takes Legal Action Against Coinbase and Gemini Over Prediction Market Services
New York has emerged as the newest jurisdiction to claim that prediction market contracts related to sports and entertainment infringe upon state gambling regulations.
On Tuesday, New York filed lawsuits against Coinbase and Gemini, continuing a trend of states asserting that prediction market contracts involving sports, entertainment, and elections breach state gambling statutes.
According to the legal filings, Coinbase and Gemini’s prediction market services function as unlicensed gambling products. The lawsuits highlight how the companies promoted their prediction markets and acted as bookmakers on their platforms. The New York Attorney General’s office further characterized the platforms’ operations, referring to users as ‘bettors’ and stating that ‘each contract constitutes a bet.’ The complaints also contend that the platforms permit individuals aged 18 to 21 to place wagers, despite New York prohibiting anyone under 21 from gambling via mobile applications.
‘As outlined above, what Respondent provides through its platform is fundamentally gambling: It enables a bettor to wager money on the outcome of a contest of chance or a future contingent event outside the bettor’s control or influence, with the understanding that they will receive something of value if a specific outcome occurs,’ the lawsuit against Coinbase stated.
New York is merely the most recent state to challenge prediction market providers over their sports and entertainment offerings. Nevada, Washington, and numerous other states have similarly filed lawsuits, arguing that at least the sports-related wagers qualify as bets rather than federally regulated swaps. This legal dispute is currently being reviewed by multiple appeals courts and is expected to eventually reach the U.S. Supreme Court.
Coinbase Chief Legal Officer Paul Grewal stated on X (formerly Twitter) that ‘prediction markets are federally regulated national exchanges’ and that Coinbase would advocate for federal oversight.
A representative for Gemini declined to comment.
Commodity Futures Trading Commission Chairman Mike Selig has contended that prediction markets, including sports-related contracts, fall under his agency’s ‘exclusive jurisdiction.’ The CFTC has filed lawsuits against Arizona, Connecticut, and Illinois to prevent them from pursuing charges against prediction market providers, and has intervened in a Nevada case to defend the providers.
Kalshi, one of the largest prediction market providers, was not listed as a defendant in Tuesday’s lawsuit. The company preemptively sued the New York State Gaming Commission last fall, requesting a federal court to rule that state gambling laws do not apply to its platform. That case continues to proceed through the Southern District of New York.
In a statement, New York State Attorney General Letitia James described both Gemini and Coinbase’s products as ‘illegal gambling operations.’
‘Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution,’ she said.
UPDATE (April 21, 2026, 22:55 UTC): Adds Gemini declining to comment.</p>